Indian students wishing to study in US universities have been required to clear TOEFL (Test of English as a Foreign Language} since probably the 1980s. It was not there when I secured my Master degree in Economics in the late 1960s. The period when I studies-d in schools and colleges was the final phase of English as a language and medium of instruction being taught the way the British taught English to the Indians when the ruled India. In our childhood days, we were told to improve our English vocabulary and composition skills by reading the English Daily Newspaper named Statesman with a dictionary in hand and read English Grammar book authored by Wren and Martin as an inferior substitute of the English Grammar book our our earlier generations had used. A person weak in English composition was not considered educated even if had a doctorate degree in Physics or Chemistry or Medicine. I studied English from the infant stage and for four years of my middle school I had to read, write and arithmetic as well as converse in English only. Despite that I always despised grammar of any language - whether English, Bengali, Hindi or Sanskrit (so many rules appeared to take away the free flow of expression of ideas) and also disliked English to English dictionary. So, despite being fluent in English communication, I always suffer red the handicap of limited vocabulary and ungrammatical liberty of composition. By the time I started learning Economics in the undergraduate college, the edge that students with flowery and sophisticated written English composition had in studying Economics has largely vanished: one now had to be fluent in mathematics or mathematical logic as the language of economics. So, there was no incentive for me to improve my English composition at that stage. English had now become a domestic Indian language of its own characteristics: English of the British had become the food for only those who studied English literature in the Colleges and Universities.
But when I had joined the United Bank of India in 1970, the seniors were all from generations that were brought up in British English environment. They appreciated flowery, grammatically correct and British like office communication drafting. The situation would change soon as communication would have to occur among a growing population conversant with Indianised English only and more logically-oriented to avoid distraction/ communication noise created by complex construction and use of uncommon words when more common synonyms were available. At the same time, office communication had to be sharply pointed, brief, free-flowing and logically connected. Learning the relevant skill in English drafting became one of the major focus area for me. I was fortunate to have my boss Dwijen Bhattacharyya, about 10 years' senior alum of the Economics Department of the University of Calcutta and very strong in the British English composition. Yet, he had developed quite a strong skill in logical binding and brevity in written office communication in English. He would in the beginning correct my drafts with affection and show how improvements could be affected. After a while, he would not correct my English any longer but would just tell me that I should redraft to bring in me more brevity and logical connectedness of sentences and paragraphs. In one session that took place in his office chamber, he had asked to me to redraft just one paragrpah of five sentences till he was fully satisfied. While I was redrafting repeatedly, my colleague, Snehangshu Bhattacharyya, in-charge of publicity and public relations and reporting to Dwijenda was simultaneously in work session with the boss. When the boss approved my sixth draft, Snehangshu Babu exclaimed at me: ' Basudeb, you can commit cold-blooded murders'. Both Dwijenda and I looked at him surprised with his out of the context remark. He was a poet of some repute and explained that he was observing me all the while tearing away one draft after another since they did not satisfy the boss and thought that a person who can destroy one's own creation with such cruelty as I did is capable of committing murders. But that was the way I learned and followed the analytical rigour in drafting for the next 28 years of my life till I stopped thinking about creating compositions in English as my job. It was a very thrilling and challenging experience that I enjoyed in drafting office communication in English with Dwijenda. And soon I would be courageous to comment on Dwijenda's revision of drafts prepared by my peers. In one case, I told him that a particular paragraph approved by him contained the word 'however' thrice within the space of just seven sentences, reflecting loose combination of thoughts in the paragraph and he readily and smiling greeted me for the observation.
Improving drafting skills was not that easy for many of my peers somewhat elder to me in age. They were very annoyed with Dwijenda's repeated correction of drafts and considered most such revision as as cosmetics and unnecessary. One of the colleagues, a former professor of both undergraduate and postgraduate courses in economics reported that often he would dream of draft correction sessions involving him and the boss: he was experiencing nightmares.
Another colleague would remain so passive during draft-revision sessions that the boss would give up. Yet, another colleague, a really intelligent guy and fast thinker, who had already taught Economics at the graduate level, had draft revision sessions during which the ideas contained in the original draft were not even getting clearly communicated to the boss' mind. Ultimately, I was given the task of drafting the office note on inter-branch transfer pricing. The author of my note, about 10 years senior to me inage a former professor in post-graduate economics course, was very affectionate to me and explained the contents of his note paragrpaph-wise and answered all the questions I had in understanding his note including the arithmetical computations. I realised what went wrong with the redrafting session my colleague had with the boss. My colleague worked on a problem which was essentially a problem of soving a simultaneous equation model but he used arithmetic logic skipping steps in the logic and our boss naturally had difficulty in compehending the logical flow of his thoughts. So, I formulated my own simultaneous equation model and tried to understand the logical working of the ideas, thoughts and calculations in the original note. It now became easy for me to draft a fresh note on the subject that was analytically more communicative to the layman reader. The Boss then took very little time in finalising the Note, fully understanding what he was approving for consideration of the Board of Directors. This mediation role in communication helped me subsequently to publish two technical articles with mathematical appendices in the Journal of India's National Institute of Bank Management- an interesting episode that I would recount a little later.
Wednesday, April 6, 2011
Of Bankable Credit Schemes: My Unfolding Voyage 56
Within two decades of socialist command economy planning in India, the economy was collapsing with agriculture failing to show sustained growth, industry affected by recession and sickness, unemployment remaining a bug bear leading to tensions, inflation rate high and both per capita income and productivity remaining low while shortages of essential goods causing tensions. To avert a bankruptcy of the government, the major banks were first brought under social control and then nationalised in 1969 to make available the private savings with the banking system to the Government for financing government debt and direct bank credit flows at less than market rates of interest / concessional interest rates to what the political leaders thought as priority borrowers (small borrowers of various types), priority sectors (agriculture, small and cottage industries, transport, small businesses, etc) and priority locations (rural areas, un-banked areas and economically backward districts).
But extending bank credit to such borrowers, sectors and areas was not necessarily commercially viable and discretion and judgement to bank branch officials could not be relied upon to usher in the desired quantum jump in the number of new bank borrowers all over the country. The political leaders and the bureaucrats needed to monitor the delivery of performance of priority sector credit and expansion of the branch banking network on a continuous basis: they needed a mechanism that could help fast proliferation of priority sector small loans and the number of beneficiaries. The only mechanism known to bureaucrats was to tell the banks to recruit new types of credit officers and formulate standardised credit schemes that makes it possible for eligible priority sector potential borrowers to get loans on a quick, virtually automatic process of credit appraisal and disbursal from thousands of bank branch offices.
The nationalised banks hand already started recruiting chartered accountants on a selective basis for deployment in the accounts departments and credit departments used to dealing with large industrial and business loans, mostly for working capital purposes and with both primary and collateral security. These people were not to be relied upon for priority sector credit because of their traditional, largely judgemental and security-oriented methods of credit appraisal, disbursement and supervision. The priority sector credit surge needed fresh blood without inhibition of standard fiance and financing disciplines. So, the nationalised banks started recruiting engineers, agronomists, persons with background and prior experience in government efforts in industrial promotion and extension and economists to deal with priority sector credit policy, procedure, appraisal, disbursal and follow-up.
Not that these could not be done by the chartered accountants who were working under the senior credit officers who have risen from the ranks in the banks. But it was not so easy to get so many chartered accountants as the Chartered Accountant Institute was careful to ensure that the supply of chartered accountants did not increase fast enough to reduce the price for chartered accountant services. But the bank chartered accountants, despite the air of importance they were enjoying, being in the major income earning activity of the banks, were not so amused with the large influx of new officers at the same levels of pay in the newly set up priority sector credit departments with so many economists. Over the lunch table, a young charted accountant and a young economists got into a debate over the superior knowledge and expertise of economists and chartered accountants. As usual such debates cannot continue or end on a logical fashion. One of my younger economist colleague retorted back to my chartered accountant colleague thus: 'Economists are getting worldwide recognition with Nobel Prize (the Nobel Award Selection Authority in Switzerland had just started declaring the name of economists winning the prestigious economics prize funded by the Bank of Switzerland). Has any accountant in the world won a Nobel Prize?'.
The smart chartered accountant opened a different front. He asked me as to when we report to duty and when we were leaving office on a working day. I told him we generally reach office just before 10 am when the office hours begin and leave as soon as the office hours end at 5 pm. He told us that they generally are in their desks by 8-30 am and leave office after 7-30 pm. I told him, 'Yes, we economists seem to have greater productivity per hour at office than you chartered accountants!' After these initial encounters we were all very close colleagues at work.
But presently, we were engaged in formulation of credit schemes. Many of these credit schemes were occupation/ activity specific and in specific locations. The first task was to conducted a survey of the intended beneficiary borrowers covering such aspects as economic conditions of the borrowers, their scale of operations, technology, productivity, equipment and capital needs, interest costs, input procurement and sales arrangements, scope for improvement in technology, scale of operations, etc. The whole purpose of such surveys is to have information enough to design standard models of operation that ensures higher level of future cash flows that enhances the borrowers income after meeting the debt obligations to the banks. Once such standardised models are evolved, it becomes easy to design specific schemes of ban credit that makes easy for bank branch credit officers to multiply small loans at a high speed. So, we were busy those days during the first half of the 1970s in survey for designing credit schemes for cycle rickshaw operators to own rickshaws, for self-driven / self-operated cab and mini-bus transport business, shoe shine boys and cobblers, clay-modellers of Kumartuli and other places who were supplying thousands of deity-idols for Hindu homes and community clubs for worshiping God, for small and marginal farmers (crop loans and farm equipment loans and also tube-well irrigation loans), for small shop-owners selling a variety of items along the roadside, small floriculturists, beetle-leaf plant growers, small utensil makers, potato growers for warehousing potatos in cold storage's, for cold storage operators, clay toy and idol manufacturers of Krishnanagar and other centres, fishermen, plastic basket and bucket manufacturers, and for various other artisans, craftsmen and traders. Some among our survey team encouraged with their experience toyed with the idea of formulating a survey-based credit assistance scheme for the women engaged in the oldest profession in a red-light area of Kolkata!
Apart from schemes, there were projects too: industrial estate projects financed by bank credit were to rent out workshop sheds with all infrastructural facilities for renting out to new bank-financed small-scale industrial units, group irrigation projects for farmers, agro-service centre projects catering to the needs of repair and maintenance of farmers' equipments, renting out tractors to farmers for ploughing operations and etc.
Schemes proliferated and small bank loans to borrowers engaged in various small-scale activities surged. Politicians and social activists were appointed on the board of directors of nationalised banks. They presented with new ideas and pointed to locations with potential to channelise bank credit for the development of rural areas. I accompanied a well-known freedom-fighter who as a worker in a factory burnt a British in the furnace of a factory, to work-out an integrated river water utilising dam-cum-canal development plan in a certain part of Murshidabad district in West Bengal: that was the first-time did I stayed in a Government Circuit House. It was a great feeling of being part of the economic development process involving flow of benefits to economically weaker fellow countrymen. But, schemes are as best as they are used: soon politicians would force pliable nationalised bank top management to organise loan fairs where politicians would distribute the loans to rural folk before election times and later give the borrowers an impression that the loans need not be repaid or serviced, resulting in large non-recoverable loans in the priority sector (the concept of provisioning against non-performing loans were yet to enter banking glossary of terms in India). Schemes were also easily used by wealthier and crooked borrowers to access bank loans and siphon off funds, leaving banks with overdue loans that would have to be written off. By that time I had left United Bank.
But extending bank credit to such borrowers, sectors and areas was not necessarily commercially viable and discretion and judgement to bank branch officials could not be relied upon to usher in the desired quantum jump in the number of new bank borrowers all over the country. The political leaders and the bureaucrats needed to monitor the delivery of performance of priority sector credit and expansion of the branch banking network on a continuous basis: they needed a mechanism that could help fast proliferation of priority sector small loans and the number of beneficiaries. The only mechanism known to bureaucrats was to tell the banks to recruit new types of credit officers and formulate standardised credit schemes that makes it possible for eligible priority sector potential borrowers to get loans on a quick, virtually automatic process of credit appraisal and disbursal from thousands of bank branch offices.
The nationalised banks hand already started recruiting chartered accountants on a selective basis for deployment in the accounts departments and credit departments used to dealing with large industrial and business loans, mostly for working capital purposes and with both primary and collateral security. These people were not to be relied upon for priority sector credit because of their traditional, largely judgemental and security-oriented methods of credit appraisal, disbursement and supervision. The priority sector credit surge needed fresh blood without inhibition of standard fiance and financing disciplines. So, the nationalised banks started recruiting engineers, agronomists, persons with background and prior experience in government efforts in industrial promotion and extension and economists to deal with priority sector credit policy, procedure, appraisal, disbursal and follow-up.
Not that these could not be done by the chartered accountants who were working under the senior credit officers who have risen from the ranks in the banks. But it was not so easy to get so many chartered accountants as the Chartered Accountant Institute was careful to ensure that the supply of chartered accountants did not increase fast enough to reduce the price for chartered accountant services. But the bank chartered accountants, despite the air of importance they were enjoying, being in the major income earning activity of the banks, were not so amused with the large influx of new officers at the same levels of pay in the newly set up priority sector credit departments with so many economists. Over the lunch table, a young charted accountant and a young economists got into a debate over the superior knowledge and expertise of economists and chartered accountants. As usual such debates cannot continue or end on a logical fashion. One of my younger economist colleague retorted back to my chartered accountant colleague thus: 'Economists are getting worldwide recognition with Nobel Prize (the Nobel Award Selection Authority in Switzerland had just started declaring the name of economists winning the prestigious economics prize funded by the Bank of Switzerland). Has any accountant in the world won a Nobel Prize?'.
The smart chartered accountant opened a different front. He asked me as to when we report to duty and when we were leaving office on a working day. I told him we generally reach office just before 10 am when the office hours begin and leave as soon as the office hours end at 5 pm. He told us that they generally are in their desks by 8-30 am and leave office after 7-30 pm. I told him, 'Yes, we economists seem to have greater productivity per hour at office than you chartered accountants!' After these initial encounters we were all very close colleagues at work.
But presently, we were engaged in formulation of credit schemes. Many of these credit schemes were occupation/ activity specific and in specific locations. The first task was to conducted a survey of the intended beneficiary borrowers covering such aspects as economic conditions of the borrowers, their scale of operations, technology, productivity, equipment and capital needs, interest costs, input procurement and sales arrangements, scope for improvement in technology, scale of operations, etc. The whole purpose of such surveys is to have information enough to design standard models of operation that ensures higher level of future cash flows that enhances the borrowers income after meeting the debt obligations to the banks. Once such standardised models are evolved, it becomes easy to design specific schemes of ban credit that makes easy for bank branch credit officers to multiply small loans at a high speed. So, we were busy those days during the first half of the 1970s in survey for designing credit schemes for cycle rickshaw operators to own rickshaws, for self-driven / self-operated cab and mini-bus transport business, shoe shine boys and cobblers, clay-modellers of Kumartuli and other places who were supplying thousands of deity-idols for Hindu homes and community clubs for worshiping God, for small and marginal farmers (crop loans and farm equipment loans and also tube-well irrigation loans), for small shop-owners selling a variety of items along the roadside, small floriculturists, beetle-leaf plant growers, small utensil makers, potato growers for warehousing potatos in cold storage's, for cold storage operators, clay toy and idol manufacturers of Krishnanagar and other centres, fishermen, plastic basket and bucket manufacturers, and for various other artisans, craftsmen and traders. Some among our survey team encouraged with their experience toyed with the idea of formulating a survey-based credit assistance scheme for the women engaged in the oldest profession in a red-light area of Kolkata!
Apart from schemes, there were projects too: industrial estate projects financed by bank credit were to rent out workshop sheds with all infrastructural facilities for renting out to new bank-financed small-scale industrial units, group irrigation projects for farmers, agro-service centre projects catering to the needs of repair and maintenance of farmers' equipments, renting out tractors to farmers for ploughing operations and etc.
Schemes proliferated and small bank loans to borrowers engaged in various small-scale activities surged. Politicians and social activists were appointed on the board of directors of nationalised banks. They presented with new ideas and pointed to locations with potential to channelise bank credit for the development of rural areas. I accompanied a well-known freedom-fighter who as a worker in a factory burnt a British in the furnace of a factory, to work-out an integrated river water utilising dam-cum-canal development plan in a certain part of Murshidabad district in West Bengal: that was the first-time did I stayed in a Government Circuit House. It was a great feeling of being part of the economic development process involving flow of benefits to economically weaker fellow countrymen. But, schemes are as best as they are used: soon politicians would force pliable nationalised bank top management to organise loan fairs where politicians would distribute the loans to rural folk before election times and later give the borrowers an impression that the loans need not be repaid or serviced, resulting in large non-recoverable loans in the priority sector (the concept of provisioning against non-performing loans were yet to enter banking glossary of terms in India). Schemes were also easily used by wealthier and crooked borrowers to access bank loans and siphon off funds, leaving banks with overdue loans that would have to be written off. By that time I had left United Bank.
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